Maintaining the one-dollar price tag has become more and more difficult for retailers like Dollar Tree in today’s economic landscape. Several factors have contributed to the mounting pressure that necessitated this pricing policy overhaul. The most pressing issue is the rising rate of inflation. Over the past year, inflation has swelled (notably reaching 6.5% by the end of 2022), reducing the purchasing power of the dollar and thereby making goods more expensive.
The steep pace of inflation has rendered it nearly impossible for Dollar Tree to keep prices at $1, leading to an unsustainable business model. Moreover, the ongoing global supply chain crisis has exacerbated the situation. The severe shipping and freight cost increases have inflated operational expenses, making it nearly impossible to obtain goods at a cost that permits a sustainable $1 price point.
